3. Capital
Capital includes both monetary resources and durable assets used for production.
- Physical Capital: Machinery, tools, buildings, computers, vehicles.
- Financial Capital: Money required for day-to-day operations.
Sources of Capital
Where do businesses get money?
- Personal Savings: Family and friends (often for small businesses).
- Loans: Borrowed from banks. The borrower pays Interest (a fee for using the money).
- Stock Market: Large companies raise money from the public by selling shares. They pay Dividends (a share of profits) to shareholders.
4. Entrepreneurship
An entrepreneur is the person who “puts it all together”.
- Role: They come up with an idea, take risks, gather Land, Labour, and Capital, and solve a problem.
- Startup: An entrepreneurial venture with limited resources aiming for rapid growth using technology.
Functions of an Entrepreneur
Note
Profile: J.R.D. Tata A visionary entrepreneur who built modern India.
- Started Tata Airlines (later Air India) in 1932.
- Expanded into steel, cars, power, and chemicals.
- Known for ethical business and caring for workers.
- Awarded the Bharat Ratna in 1992.